A start-up at Stanford University worth millions, could be India’s Unicorn Tech

“When we started this 12 months ago, every conversation we had was saying ‘You’re completely out of your mind, this is never going to work,'” said teen CEO Adit Balecha.

However, Palicha has been able to prove these skeptics wrong – it has now approached the case of the unicorn and it is one of India’s fastest growing fast-trading apps. The Unicorn Corporation is a startup valued at over $1 billion.

Zepto is a startup that promises to deliver groceries in less than 10 minutes. Despite being just one of many companies joining the spot trade wave, it has already caught the eye of investors.

Its last cash injection of $200 million in May 2022 valued the company at $900 million, just nine months after its launch.

We figured this was just a more exciting opportunity than studying at a high-end university.

Edith Balecha

Co-founder and CEO, Zepto

Its rapid growth is led by Palicha and Kaivalya Vohra, two 19-year-olds who left Stanford University to pursue their entrepreneurial dreams.

“At that point, we had already expanded our annual revenue to $2 million. We said this was an opportunity to raise a significant amount of capital, the product has become a fit for the product market,” Palicha told CNBC Make It.

“How many people in their lives get the chance to build a potential generation company? We’ve discovered that this is just a more exciting opportunity than studying at a prestigious university.”

45 to 10 minutes

The idea for Zepto came in July 2021 – when childhood friends were stuck at home in Mumbai, in the middle of the Covid-19 pandemic and a national lockdown.

At that time, the demand for delivery services soared as many stayed at home.

Online Grocery [would] Delivery takes six or seven days, and offline options are closed or practically unavailable. “It was very difficult for us to get groceries,” said Balecha, CEO of Zepto.

“We’ve had sort of similar conversations with our neighbors who have pretty much been complaining about the same problem. That’s when we said…why not try to build a solution for people in our area?”

If you look at all the other major categories of e-commerce… you take them all and combine them, they are a small part of the grocery market.

Edith Balecha

Co-founder and CEO, Zepto

But Palicha and Vohra were no strangers to the instant grocery delivery business. In 2020 – at just 17 years old – they started KiranaKart, which they said delivered groceries in Mumbai in less than 45 minutes.

“Some people were getting deliveries [within] “A time frame of 10 to 15 minutes,” Vohra said.

“In terms of their retention, how much they liked the platform and how often they referred to their friends, [it] It was much higher for those people who got deliveries in that time frame.”

“And that’s why we said, ‘Look, maybe there’s some value in exploring that.'”

Zepto isn’t the only fast-trading startup in India, and competition is heating up both locally and globally. The country’s online grocery market is set to be worth about $24 billion by 2025, according to Redseer.


They weren’t wrong. According to research by consultancy Redseer, India’s online grocery market could be worth $25 billion by 2025 and this is an opportunity that “was too compelling to miss,” Paliccha said.

“If you look at all the other major categories of e-commerce – electronics, apparel, you take them all and combine them, it’s a small part of the grocery market,” he added.

Building trust and reliability

In order to fulfill grocery orders in less than 10 minutes, the duo created a network of dark stores or small distribution centers across cities.

Dark stores are closed to the public, and residential goods are only for online ordering.

“We design our network across the city, to make sure that our pick-up points are very close to population centers in a particular neighborhood,” Balicha said.

In order to fulfill grocery orders in under 10 minutes, the duo created a network of dark stores, like the one above, across cities.


“What ultimately happens is that our average delivery distances are very short, and we can consistently get deliveries done within 10 minutes.”

The startup added that the average delivery distance is 1.7 to 2 kilometers. She added that other forms of local superconductivity could be “two to 2.5 times longer than that”.

Zepto says that today it operates hundreds of darkroom stores in 10 cities in India, and employs tens of thousands of delivery drivers. Palecha added that she currently delivers “90 to 95%” of her orders between five and 20 minutes.

But speed isn’t Zepto’s only secret to retaining customers and building loyalty. The startup, whose name comes from the zeptosecond – the smallest unit of time – claimed to be adding 100,000 new users per day.

“To really retain customers over the long term, you really need to build trust and reliability. Reliability comes in many ways,” said Vohra, who is also chief technology officer.

“Yes, we do deliver on time, but also reliability in terms of – if you order 10 things, I get exactly those 10 things. And if you order fruits and vegetables, [they’re] of the highest quality possible.”

Keep the liquidity burning

Investors are also excited about the popularity of Zepto.

To date, the company has attracted $360 million from investors, including Y Combinator, Kaiser Permanente and Nexus Venture Partners. The latest funding round puts the company on course for a potential $1 billion valuation.

One of the key factors to the success of Zepto’s investments, Palicha said, is “operational discipline.”

He added, “When we went to investors this time, we showed very clear ways to be profitable. We’ve gone from $0 in revenue about a year ago to today, and we’re making hundreds of millions of dollars in annual revenue.”

“We’re still talking in terms of multiples and not percentages when it comes to our growth rate, and that’s something we’re happy to do.”

From day one, we… force ourselves to be efficient to make every dollar last.

Edith Balecha

Co-founder and CEO, Zepto

Zepto claims to have been able to cut its cash-burn rate by 5 times on a per-order basis, while achieving an 800% quarter-on-quarter revenue growth.

However, gone are the days of easy money for cash-burning tech companies, with interest rates soaring and investors demanding more results. However, the young founders remain unfazed.

“We’re in a position where you look at the size of our balance sheet, we’ve actually had several years of capital, in the context of this downturn,” Balicha said.

“From day one,…we forced ourselves to be efficient to make every dollar last. We are able to fulfill more orders with the same amount of cash, and we can acquire more customers with the same amount of cash.”

The founders of Zepto may be young, but their conviction in their product is unwavering. “Whether it’s in front of an investor, a senior executive, or any government shareholder and regulator, you understand that what you are building is on the right side of what customers want,” said Aadit Palicha (right).


The duo said that keeping costs lower than its competitors in the high-growth technology category has given them an advantage.

“This puts us in a position where we can continue to grow sustainably, as others have been forced to… spur layoffs, withdraw growth plans and contract to survive in a market like this,” Balicha added.

Touching the “billion mark”?

Because of that challenging environment, Palicha and Vohra don’t rest on their laurels despite the new funding that Zepto has in the bag.

“The main focus now is just building the incremental scale that we need to break-even in key markets. Once we have a balance sheet that is now operating at break-even, we can begin to expand into new cities with more confidence and clarity,” Palicha said.

Zepto was previously reported to have annual revenues of $200 million to $400 million and the founders are now hoping to “touch the billion mark.”

Balecha added:[Zepto] It came out as a personal project between Kaivalya and [me] To see if we can solve a problem on a small scale in our area.”

“It eventually evolved into the company we are today, and we are incredibly grateful for it.”

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